ABS-CBN loses P258.5-M market cap as SolGen files quo warranto petition
ABS-CBN Corp. lost P258.593 million in market capitalization on Monday, as its shares fell by 1.76% at the close of trading after government lawyers asked the Supreme Court to forfeit the company's legislative franchises.
Shares of ABS-CBN plunged to P16.70 apiece, down by 30 centavos or 1.76% from P17.00 per share last Friday.
In the process, the company lost P258.593 million of its market capitalization to P14.394 billion, down from P14.653 billion on Friday.
Sought for comment, Diversified Securities Inc. equity trader Aniceto Pangan said the drop could be attributed to the quo warranto filed against the company.
"It creates uncertainty on the part of the company if it cannot renew its franchise congressional approval," he explained in a text message.
Led by Solicitor General Jose Calida, his office filed a quo warranto petition against the broadcast network and asked the Supreme Court to drop the franchise of ABS-CBN Corp. and its subsidiary ABS-CBN Convergence Inc.
"We want to put an end to what we discovered to be highly abusive practices of ABS-CBN benefitting a greedy few at the expense of millions of its loyal subscribers. These practices have gone unnoticed or were disregarded for years," Calida said in a statement.
The petition was filed even as the company's franchise granted by Congress was set to expire in March, with bills seeking to renew the franchise still pending.
For its part, ABS-CBN maintained that it did not violate the law, contrary to claims made by Calida, slamming the petition as "ill-timed."
Malacanang has since denied having a hand in the government's petition, with Presidential Spokesperson Salvador Panelo saying President Rodrigo Duterte had "nothing to do" with the legal action.
Duterte had consistently threatened to oppose the renewal of ABS-CBN's franchise, as he earlier claimed the network did not air political advertisements during the 2016 election campaign which were already paid for.
Moving forward, Pangan said shares of ABS-CBN could be expected to slide further should the quo warranto issue remain unresolved.
"I think that's a possibility unless the government acts to retrieve this back," he explained. — DVM, GMA News